Question :
41. Carlos bought a building for $113,000 in 2010. He built : 1313590
41. Carlos bought a building for $113,000 in 2010. He built an addition to the building for $26,000. In 2014, he sold it for $186,000. What was his long-term capital gain?
a. $0
b. $47,000
c. $73,000
d. $99,000
e. $186,000
42. An asset’s adjusted basis is computed as:
a. Original basis + capital improvements – accumulated depreciation.
b. Original basis – capital improvements + accumulated depreciation.
c. Original basis + capital improvements + accumulated depreciation.
d. Original basis + capital improvements + gain or loss realized.
e. None of the above.
43. The adjusted basis of an asset may be determined by the:
a. Selling price + gain realized.
b. Selling price – gain realized.
c. Selling price + capital improvements – accumulated depreciation.
d. Original basis + capital improvements – selling price.
e. None of the above.
44. Bennett purchased a tract of land for $20,000 in 2005 when he heard that a new highway was going to be constructed through the property and the land would soon be worth $200,000. The highway project was abandoned in 2014 and the value of the land fell to $15,000. Bennett can claim a loss in 2014 of:
a. $0
b. $5,000
c. $165,000
d. $180,000
e. None of the above
45. Sol purchased land as an investment on January 12, 2005, for $85,000. On January 31, 2014, Sol sold the land for $25,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount realized (not gain realized) on the sale of the land?
a. $10,000
b. $25,000
c. $70,000
d. $95,000
e. None of the above
46. For purposes of determining the adjusted basis of a capital asset at the time of its sale,
a. Capital improvements are added to the basis.
b. Ordinary repairs reduce the adjusted basis.
c. Accumulated depreciation is added to the basis.
d. The basis does not include costs such as title insurance and escrow fees related to the initial purchase.
47. Which of the following is true about capital gains?
a. Short-term capital gains are not netted with other capital gains and losses.
b. For 2014, long-term capital gains are subject to special tax treatment.
c. Long-term capital gains are never taxed.
d. Net short-term capital gains are not netted with net long-term capital losses.
e. None of the above.
48. For the year 2014, Susan had salary income of $20,000. In addition she reported the following capital transactions during the year:
a. $19,000
b. $20,000
c. $24,000
d. $25,000
e. None of the above
49. In December, 2014, Ben and Jeri (married, filing jointly) have a long-term capital gain of $55,000 on the sale of stock held for 4 years. They have no other capital gains and losses for the year. After standard deduction and personal exemptions, their ordinary income for the year, before the capital gain, is $73,800, making their total income for the year $128,800, ($73,800 + $55,000). In 2014, married taxpayers pay tax of $10,163 at 10-percent and 15-percent rates (from the tax rate schedules) on the first $73,800 of ordinary taxable income and 25 percent on ordinary taxable income up to $148,850. What is their total tax liability?
a. $10,163
b. $18,413
c. $19,320
d. $32,200
50. Robert and Becca are in the 25-percent tax bracket. They have a long-term capital gain of $28,000 and a long-term capital loss of $17,000 on sales of stock in 2014. What will their capital gains tax be in 2014?
a. $1,650
b. $2,200
c. $2,750
d. $11,000
e. None of the above is correct
